Farren Care Center struggles from stalemate with state over Medicaid reimbursement

Photo by Cori UrbanThe Farren Care Center is located in the Turners Falls section of Montague.

MONTAGUE - Farren Care Center is feeling the crunch of a six-year stalemate with the state over its Medicaid reimbursement rates. The long-term nursing care facility says it needs more funding now, but its efforts to get rate help from the state have been fruitless.

Farren, which is part of the Sisters of Providence Health System, is the only facility of its kind in the state, officials say. It provides care to up to 122 patients described as “medically involved” and mentally ill.

Laurie Benoit, of Buckland, a fund-raiser at the University of Massachusetts at Amherst, is among family members who say they are glad Farren continues to operate. She said her late mother, an Alzheimer’s patient who died in 2008, had been rejected or evicted from about eight nursing homes before she found a place at Farren.

“We got my mother back,” said Benoit. “She was still an Alzheimer’s patient, but at least she was able to smile.”

Ninety-five percent of Farren patients have insurance through Medicaid, which reimburses nursing homes for the care they provide.

Since 2005, Farren’s sister hospital, Mount Saint Vincent Care Center in Holyoke, has received reimbursement rate increases totaling $18 per patient per day, according to data from Sisters of Providence. Farren has not received any increases, keeping its total rate at an average of $282 per patient per day for six years.

Operating costs at Farren, however, have gone up, said administrator Jim Clifford. The center employs more than 200 people and is among Franklin County’s largest employers.

Farren operates under a special contract with the commonwealth. It does not receive standard reimbursement rates and must negotiate for any increases.

“It is a partnership,” said Daniel Keenan, vice president of government relations at Sisters of Providence. “We’re providing the care, the commonwealth is paying us to provide the care. We want to continue that partnership.”

During the past three years alone, Farren has lost more than $800,000, he said. He said he was unsure how much the facility has lost since 2005.

At the moment, Farren is seeking a $15 per patient per day hike. Keenan said a $10 increase would be the bare minimum for Farren to stay afloat.

“In the face of shrinking state revenue due to the national economic collapse, state agencies have had to make some very difficult budget decisions,” Kritz said. “While we have not been able to fund rate increases for nursing facilities, we have been able to hold rates steady in a budget climate in which many providers have experienced rate decreases.”

Complicating the issue is the Medicaid User Fee Assessment, a tax designed to increase state revenues, which will generate matching federal funds. This money then serves any number of purposes, including bringing more revenue into the Medicaid system for reimbursements.

Built into Farren’s reimbursement rate is $16 to pay the tax, but McLaughlin said the state charges them just under $20. He said other nursing homes receive rate increases to offset any changes in the user fee, but Farren does not.

“It’s a thinly disguised Medicaid rate decrease,” said McLaughlin.

Keenan said the fee alone costs Farren about $150,000 annually.

Keeping the rate the same could mean that crucial costs, like building maintenance, are not covered, McLaughlin said. The oldest wing of the center, which is located in Turners Falls, was constructed in 1900 and the residential wing was added in 1965.

“You’ve got an old, tired physical plant,” said McLaughlin. “You can keep patching it year after year, but what do you do if the boilers give out or if you need to replace the roof? That’s several hundred thousand dollars.”

There are no current plans to cut staff or reduce salaries, according to McLaughlin. But, he said there is concern staff could leave to seek work elsewhere because employee retention often relies on competitive salaries.

Mark Fulco, a senior vice president at Sisters of Providence, contends that another facility likely would not be able to care for Farren’s patients.

“We have incredibly high quality and very reasonable, if not low, costs, relatively speaking,” he said. “I think it would be very difficult for anybody to replicate.”

Clifford said the average age of patients is in the late 70s, but some are in their 30s and 40s. At any given time, the facility is 99 percent occupied and often has a waiting list, he said.

“It’s incumbent on the commonwealth, the Legislature and the politicians to treat Sisters of Providence and Farren in the same way that they treat all facilities,” said Benoit. “It’s the hardest place in our community to not fund.”